Sidebar

Search

Search ...

In a democracy, people used to meet, identify a need that was better served by public action than the private sector, and they then voted to tax themselves to pay for it.

Today, on Waiheke Island, we elect representatives who have created a very curious system whereby effective democracy has been replaced by a professional class of "officers" who use elected officials as rubber stamps for policy. Thus, the money we pay in rates does not result in local control.

Experience has shown that when the Council gets in the way, the most effective answer is in court. Apparently the department that must defend an action would rather use that budgeted money for department growth, not lawyers and experts. However, this is a horribly inefficient way for democracy to work.

It is far more effective to lead.

But this requires money.

The charitable trusts that have been created to effect this leadership movement are donee organisations, meaning donations are tax deductible. That is one route.

Another tool that is emerging is the social enterprise. In this form, taxes are paid on profits, but the purpose of the organisation can be social and environmental as well as profit.

A history lesson may be useful here:

From the time of the Norman Conquest until the reign of Queen Elizabeth I, (1559 -1603) governance in England was based on a relationship between the King and the landed Aristocracy that was given title to land with a promise of fealty to the King. That began to change when trade began to create a new class of wealthy tha became powerful: the merchants of London. During the 500 years leading up to that time, charity was a Christian obligation of the nobility. Wealth was land and the complex relationships of feudalism included caring for the weak, infirm and aged and other acts that were not profitable, but important for the wellbeing of the realm.

However, with the emergence of the Merchant Class, a new source of power grew in England, the seed of what became the British Empire. On 31 December 1600, the Queen gave a royal charter and monopoly to the East India Company. A year later, the Charitable Uses Act 1601 became law, thus bifurcating doing well from doing good. Instead of noblesse oblige, one could make a monetary contribution to a tax-exempt organisation set up for the social purposes necessary to the wellbeing of the realm. Four centuries later, businessmen still run the world, and charity is a highly regulated service that suffers from the bifurcation.

The Social Enterprise is changing that.

In a Social Enterprise, instead of compliance with IRD and Charities Services requirements, one simply established a NZ company for $160. One then writes a charter that addresses the three-P's: People, Planet, Profits. It removes the artificial separation of wealth-creation vs charity.

It is charitable to give a man a fish, as the old saying goes (forgive the gender language, but old sayings were not PC)

It is charitable to teach a man to fish, because this is education.

But it is not charitable to help the man set up a fish farm, because the man then becomes a successful business person.

The Social Enterprise allows the latter, and the state does not interfere as long as taxes are paid and the law of the land followed.